Recent Posts in Prenuptial Agreements Category

In Texas pre-marital or pre-nuptial agreements are enforceable so long as it is in writing and is signed by both parties. The agreement is enforceable even though without consideration, unlike a deed where consideration is necessary. Under Section 4.001 of the Texas Family Code, a 'Premarital Agreement" is a written agreement between prospective spouses in contemplation of marriage and is effective upon marriage.

The parties to a premarital agreement may contract with respect to:

(1) the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;

(2) the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;

(3) the disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;

(4) the modification or elimination of spousal support;

(5) the making of a will, trust, or other arrangement to carry out the provisions of the agreement;

(6) the ownership rights in and disposition of the death benefit from a life insurance policy;

(7) the choice of law governing the construction of the agreement; and

(8) any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

Americans are divided on their opinion concerning the morality behind a prenuptial agreement. Around one fourth of Americans think premarital agreements are for the “rich and famous”, while well over a fourth agree they are a must for making smart financial decisions in a marriage. Although pre-nups are often used to protect the assets of a wealthy spouse, many couples of more modest means, such as a middle class income, are turning to prenuptial agreements for their own purposes. Some of these reasons might be to split up property for children from previous marriages, define each spouse’s financial rights, and avoid conflict in case of divorce by splitting up assets in advance.

 “San Francisco family law attorney Stephen Ruben sees more Baby Boomers entering such contracts after marriage-known as post-marital agreements- as their parents die. “They want to preserve their inheritances so it doesn't’t go to their spouse. They want it to remain within the bloodline,” he says. Kathleen Pender, San Francisco Chronicle 05/04/08.

What is a prenuptial and what purpose does it serve?

A prenuptial agreement is a contract written between two prospective spouses on the terms of marriage and property. It is a legally binding agreement between a couple before entering marriage and secures or segregates separate and community property such as rights to certain real property, account, and other assets as well as debts. The contract states all of the property each person owns and how the assets will be divided in the event of a death or divorce.

Is it right or wrong for you?

A prenuptial agreement may be beneficial to you and your spouse for many reasons. If you or your spouse have a substantial amount of wealth, expect to acquire a hefty inheritance, have been married in the past, own a business, have children from a prior marriage, have a high risk job, wish to keep all assets and debts separate, own income producing property, or wish to protect your hard earned existing assets then entering into a prenuptial agreement might be for you.

On the other hand, many people feel a prenuptial agreement takes away from the sanctity of marriage.  Some view the prenuptial agreement as a big trust factor between prospective spouses, and say a prenup is never needed when the two people involved really love each other. Some feel the contract can doom a marriage from the start, and the topic can be an uncomfortable one to bring into a relationship.

These contracts only benefit a couple if they are planning ahead of the marriage and are comfortable with segregating property, income, and debts that will be utilized into the marriage or earned and acquired during the marriage. It will also help to segregate acquired or debt and liabilities incurred during the marriage between spouses. For most individuals, a prenuptial may not be necessary. However, if you are a high net worth individual or a person who has a high earning capacity, it is advisable to enter into a prenuptial with your prospective spouse as well as consult with a Texas prenuptial lawyer or family law attorney before entering into the marriage vow.